India slipped from fourth to eighth position in the Renewable Energy Country Attractiveness Index, due to high entry barriers for foreign investors and increasing cost of financing, finds a Ernst and Young (E and Y) survey.
However, the country gained the hot spot as the market with increased focus on the role of renewable energy driving new levels of power sector investment. India is only behind Belgium in the priority the renewable sector receives.
“A high barrier to entry for external investors causes India to score lower than most of its top 10 rivals. Also, bankability is jeopardised by the high cost of financing and significant infrastructure barriers here,” said Sanjay Chakrabarti, partner and national leader for clean-tech, E and Y India.
He said that while the country’s rating may have slipped, there were significant positives including the solar energy front, which attracted interest of several states.
Meanwhile, E and Y observed that the country was embroiled in trade wars that are sweeping through the global solar market.
In February, the US lodged a complaint with the WTO that domestic content requirements attached to the National Solar Mission allegedly discriminate against US solar equipment imports.
“India is currently in talks with the US over the complaint, but the government insists that more than 70 per cent of the 551 MW solar capacity installed since the start of the mission has been built using imported modules. Last November, the country began its own anti-dumping investigation for solar cells from the US, mainland China, Taiwan and Malaysia,” Chakrabarti said.